Overall business confidence in London – an average of business prospects and economic optimism, rose 12 points in March to 17 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the capital, surveyed between 1st and 15th March, reported higher confidence in their business prospects, at 29 per cent, and an increase in economic optimism, at two per cent. Together, this gives an overall confidence of 17 per cent.
A net balance of 17 per cent of firms in the region expected to hire more staff during the next year, up three points on last month.
Across the UK, overall confidence climbed six points to 10 per cent as firms’ optimism about the economy and their confidence in their own prospects bounced back from February’s lows.
Nationally, companies’ confidence in their own business prospects rose seven points to 20 per cent but firms are evenly split on whether they feel optimistic or pessimistic about the economy.
The Lloyds Bank Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking said, “The first weeks of March showed a much more positive picture from London businesses. Overall confidence in the capital was boosted by rising expectations about firms’ own business prospects.
“This is also reflected in an increase in hiring intentions, with many firms looking to increase their staff numbers in the coming months.
“Whatever the future holds, we’ll be at the side of local businesses every step of the way. That’s why we’ve pledged to lend £2.6bn to firms in the capital this year alone, helping them to achieve their ambitions.”
Across the region, a net balance of 15 per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, up one point on a month ago.
National and sector overview
London was the third most confident region in the UK in March. Businesses in Yorkshire showed the most confidence, at 21 per cent, ahead of the East Midlands (18 per cent). Both London and the West Midlands recorded overall confidence of 17 per cent.
Those in Scotland were the least confident, with an overall confidence reading of minus three per cent, 13 points below the national average.
The overall confidence of businesses in the retail sector rose by eight points to reach a four-month high of 22 per cent. Services made an 11-point improvement to seven per cent, but continued to lag behind other sectors.
However, the overall confidence of manufacturing and construction firms fell for a second month, to 10 per cent and 13 per cent respectively, suggesting the outlook in both sectors has dimmed since the start of the year.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking said, “The strengthening of confidence in the first half of this month provides some solace in light of recent pessimism, and there has been a slight improvement in firms’ expectations about the impact of the UK’s departure from the EU.
“However, levels remain below the long-term average and continue to show volatility as political negotiations continue.”